Debate: Constitutionality of US health insurance mandates

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Are US health insurance mandates constitutional?

Background and context

During the debate surrounding the proposed US health care reform legislation of 2009 and 2010, one question at hand was whether requiring people to buy private health insurance was Constitutional.

Since the passage of the legislation in March of 2010, many state governments, governors, and attorney generals have pressed forward with lawsuits centered on the idea that the individual mandate in the legislation is unconstitutional. Opponents' main argument is that requiring all individuals to buy private insurance violates individual freedoms to abstain from the purchase of any given private product, and that Congress does not have the authority to regulate and punish the decision to abstain. Supporters, however, contend that, in order to ensure the uninsured and lower the costs of health care, all individuals must be included in the risk pool. They argue, therefore, that Congress has a compelling interest under the Commerce Clause to mandate that all individual buy insurance. These and other arguments in the debate are outlined below.

Mandates: Is requiring individual purchases of private products just?

Pro

There is no fundamental right to go without insuranceMark Hall. "Is it unconstitutional to mandate health insurance?" August 25th, 2009: "Under both liberal and conservative jurisprudence, the Constitution protects individual autonomy strongly only when “fundamental rights” are involved. There may be fundamental rights to decide about medical treatments, but having insurance does not require anyone to undergo treatment. It only requires them to have a means to pay for any treatment they might choose to receive. The liberty in question is purely economic and has none of the strong elements of personal or bodily integrity that invoke Constitutional protection. In short, there is no fundamental right to be uninsured, and so various arguments based on the Bill of Rights fall flat. The closest plausible argument is one based on a federal statute protecting religious liberty, but Congress is Constitutionally free to override one statute with another."

People can choose to go without insurance; they'll just be fined Jack M. Balkin. "The Constitutionality of the Individual Mandate for Health Insurance." New England Journal of Medicine. January 13th, 2010: "it is not actually a mandate. It is a tax, which people would not have to pay if they purchased health insurance. The House bill imposes a tax of 2.5% on adjusted gross income if a taxpayer is not part of a qualified health insurance program. The Senate bill imposes what is called an “excise tax” — a tax on transactions or events — or a “penalty tax” — a tax for failing to do something (e.g., filing your tax return promptly). The tax is levied for each month that an individual fails to pay premiums into a qualified health plan. [...] Taxing uninsured people helps to pay for the costs of the new regulations. The tax gives uninsured people a choice. If they stay out of the risk pool, they effectively raise other people’s insurance costs, and Congress taxes them to recoup some of the costs. If they join the risk pool, they do not have to pay the tax. A good analogy would be a tax on polluters who fail to install pollution-control equipment: they can pay the tax or install the equipment."

Mandates create cartel of govt-supported insurance companies"Health Care Reform And The Constitution." PoliGazette. August 23rd, 2009: "it would for the first time involve the government setting up either a government monopoly or a government-selected cartel for which it would then use statutory power to require each and every citizen to become customers. The government would then have completely eliminated any pretense of individual market freedom, creating a situation where individuals would be required to contribute money out of each and every paycheck to either a government entity which would be staffed and/or controlled by political appointees or to a cartel made up of companies that would owe their continued existence on the cartel list to the continued acquiescence of political overseers. Either way, the reduction in individual autonomy and freedom over health care choices would be dramatically decreased and inevitably politicized. Companies that are good contributors to the party currently in power would be allowed to stay on the list so that consumers could still choose them. Companies that the party currently in power chooses to dislike would be excluded from the cartel and driven out of power."

Enforcing mandates may intrude on Constitutional rightsPeter Urbanowicz and Dennis G. Smith. "Constitutional implications of an 'individual mandate'" Federalist Society: "The mechanisms of enforcement of an individual mandate would invite scrutiny as well. Sherry Glied, Ph.D., who was recently nominated by President Obama become Assistant Secretary for Planning and Evaluation at the U.S. Department of Health and Human Services has warned, '[d]eveloping a system to promptly identify and penalize scofflaws will take effort and ingenuity, particularly in our diverse and mobile country. It may require a degree of intrusiveness and bureaucracy that some will find unpalatable.' [...] Currently, individuals without auto insurance are identified during traffic stops by police or when applying for or renewing a driver’s license. Would such “effort, ingenuity, and intrusiveness” require hospitals and doctors to report to the federal government patients without health insurance presenting to their emergency rooms or offices? Or might it inspire enforcement mechanisms employed in child support cases such as the denial of certain government controlled licenses or withholding of tax refunds. As previously noted, the Senate HELP Committee draft bill suggests that insurance companies and employers would be required to file annually with the Internal Revenue Service the equivalent of a Form “W-4” or '1099' and report to the IRS all individuals with health insurance."

General welfare: Are mandates consistent with welfare powers of Congress?

Pro

Congress has power to level insurance mandates for general welfare Democratic House Majority Leader Steny Hoyer said in November of 2009: "Well, in promoting the general welfare the Constitution obviously gives broad authority to Congress to effect that end. The end that we're trying to effect is to make health care affordable, so I think clearly this is within our constitutional responsibility." The words "general Welfare" show up in the first line of Article I, Section 8: "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States."

Con

Constitution does not grant power for health insurance mandatesLarrey Anderson. "No health care in the Constitution." American Thinker. November 2, 2009: "The words 'general Welfare' show up in the first line of Article I, Section 8: 'The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States ... [Emphasis added.]' Notice that the Constitution doesn't say the 'general welfare of the citizens of the United States.' It says "general Welfare of the United States.' This clause only gives the Congress the power to raise money to defend the country and pay for the day-to-day operations of the government. It says nothing at all about building bridges to nowhere, or paving bike paths, or spending money on any other kind of pork barrel project -- including health care."

Taxation powers: Does mandate fall under taxation powers?

Pro

Health insurance mandates fall under taxation powersMark Hall. "Is it unconstitutional to mandate health insurance?" August 25th, 2009: "An insurance mandate would be enforced through income tax laws, so even if a simple mandate were not a valid 'regulation,' it still could fall easily within Congress’s plenary power to tax or not tax income. For instance, anyone purchasing insurance could be given an income tax credit, and those not purchasing could be assessed an income tax penalty. The only possible constitutional restriction is an archaic provision saying that if Congress imposes anything that amounts to a 'head tax' or 'poll tax' (that is, taxing people simply as people rather than taxing their income), then it must do so uniformly (that is, the same amount per person). This technical restriction is easily avoided by using income tax laws. Purists complain that taxes should be proportional to actual income and should not be used mainly to regulate economic behavior, but our tax code, for better or worse, is riddled with such regulatory provisions and so they are clearly constitutional."

Commerce clause: Are mandates constitutional under commerce clause?

Pro

Commerce clause gives power to mandate health insuranceMark Hall. "Is it unconstitutional to mandate health insurance?" August 25th, 2009: "Constitutional attacks fall into two basic categories: (1) lack of federal power (Congress simply lacks any power to do this under the main body of the Constitution); and (2) violation of individual rights protected by the “Bill of Rights.” Considering (1), Congress has ample power and precedent through the Constitution’s “Commerce Clause” to regulate just about any aspect of the national economy. Health insurance is quintessentially an economic good. The only possible objection is that mandating its purchase is not the same as “regulating” its purchase, but a mandate is just a stronger form of regulation. When Congressional power exists, nothing in law says that stronger actions are less supported than weaker ones."

Con

Many attorneys general have fought constitutionality of mandates. Since the passage of the legislation in March of 2010, many state governments, governors, and attorney generals have pressed forward with lawsuits centered on the idea that the individual mandate in the legislation is unconstitutional.[1]

Commerce clause does not authorize health insurance mandates Congressional Research Service: "Despite the breadth of powers that have been exercised under the Commerce Clause, it is unclear whether the clause would provide a solid constitutional foundation for legislation containing a requirement to have health insurance. Whether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this clause to require an individual to purchase a good or a service."[2]

State powers: Is a mandate consistent with separating fed and state powers?

Pro

Fed has power to institute necessary national insurance mandates. The only way that health insurance reform will work nationally, helping insure over 30 million uninsured and reducing premiums for every one, is if all Americans are required to buy insurance and be involved in a national risk pool. Because there is a compelling benefit to the "general welfare" to institute such a national program, the federal government does have Constitutional authority to impose a health insurance mandate. If the States were left to do this, with some instituting a mandate and some not, many would be left uninsured and the risk pool would not be adequately spread. The difference in benefits to the country clearly justifies federal action under the Constitution.

Precedent: Is a mandate to buy health insurance precedented?

Pro

Insurance mandates will not set catastrophic precedentErwin Chemerinsky. The Federalist Society Online Debate Series: Individual Health Care Insurance Mandate Debate. November 3, 2009 November 6th, 2009: "Mr. Rivkin says that if Congress can do this, there will be no limit to Congress's power. He says that this is the commerce clause "on steroids" and that Congress will be able to regulate everything, even who people have over to their homes for dinner. He says that the system of dual federalism will be at an end. Such hyperbole and apocalyptic predictions are familiar in this area. In 1918, in Hammer v. Dagenhart, the Supreme Court declared unconstitutional a federal law that prohibited the shipment in interstate commerce of goods made by child labor. The Court concluded its opinion by declaring: "[I]f Congress can thus regulate matters entrusted to local authority by prohibition of the movement of commodities in interstate commerce, all freedom of commerce will be at an end, and the power of the states over local matters may be eliminated, and thus our system of government practically destroyed." For more than 70 years Congress has prohibited child labor and none of these dire predictions came true. Nor would allowing Congress to mandate the purchase of health insurance mean that Congress could regulate who people invite to their homes for dinner or end our system of federalism."

Con

Insurance mandates set dangerous precedent for federal power The Congressional Budget Office acknowledged the unprecedented nature of an individual mandate when assessing the Clinton health care reform proposal of 1993: “A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States. An individual mandate has two features that, in combination, make it unique. First, it would impose a duty on individuals as members of society. Second, it would require people to purchase a specific service that would have to be heavily regulated by the federal government." - Hartman, Robert and van de Water, Paul, “The Budgetary Treatment of an Individual Mandate to Buy Health Insurance,” Congressional Budget Office memorandum, August 1994.

Erwin Chemerinsky. The Federalist Society Online Debate Series: Individual Health Care Insurance Mandate Debate. November 3, 2009 November 6th, 2009: "Indeed, the vertical separation of powers, under which the federal government possesses limited and enumerated powers, while the States wield general police powers, is the key part of our constitutional architecture. Far from being an 18th century affectation, these structural limitations on government powers were designed to protect individual liberty. In the Framers' view, these structural limitations on the ability of the federal government to exercise authority were the primary ways of ensuring that no single government entity would grow too powerful. They were viewed by the Framers as the most important way of protecting liberty, far more important than even the provisions of the Bill of Rights. [...] Professor Chemerinsky's vision of a Commerce Clause on steroids would fundamentally warp our constitutional architecture. Because every single decision by individual Americans, be it buying health insurance, cars, health club memberships or any other good or service, has some impact on the economy, it could be subject to regulation by Congress. Indeed, Congress would be able to compel how individuals would dispose of every penny of whatever monies they have left after paying taxes, transforming Americans into virtual serfs."

Pro

Car insurance is mandatory; why not health insurance too. If the government is requiring that individuals buy car insurance, why should it not also be allowed to require that individuals buy health insurance?

Driving is not a choice for many; buying insurance is mandatory. Some say that there is no mandate to buy car insurance because if you don't want to buy that car insurance, you simply don't have to drive. Yet, for the majority of families and workers, driving is a necessity and not a choice. So, the mandate on drivers to buy insurance is, therefore, very analogous to a mandate on individuals to buy health insurance.

Medicare precedent: Does Medicare set a precedent for insurance mandates?

Pro

Medicare tax mandate sets precedent for health insurance mandateDavid Orentlicher. "An Individual Mandate to Purchase Health Care Insurance Is Constitutional." Huffington Post. December 14, 2009: "a mandate to purchase insurance can be justified by the Constitution's grant to Congress of a taxing power and a commerce clause power. The taxing power is a well-established basis for enacting an individual mandate. Indeed, this country has had a tax-based mandate to purchase health care insurance for nearly 45 years. The Medicare program imposes a payroll tax on Americans as a way to fund coverage of their hospital costs once they reach age 65. People cannot opt out of Medicare; it is an obligatory system of health care insurance for one's senior years. Similarly, Congress can use a payroll tax to implement a mandate for individuals to purchase health insurance before they reach age 65. Under the House bill, for example, people will pay a 2.5 percent tax on their income unless they have health care coverage."

Con

Social security precedent: Does social security set precedent for mandates?

Pro

Con

Social security is not analogous to insurance mandatesPeter Urbanowicz and Dennis G. Smith. "Constitutional implications of an 'individual mandate'" Federalist Society: "It is worth noting that the architects of the Social Security Act harbored grave doubts about its constitutionality, which was ultimately settled on the taxing power of the United States.6 However, in contrast to an individual mandate, federal benefits are attached to Social Security and Medicare taxes and there is a specific “contract” involved between the current payment of taxes and future government benefits. No such relationship would exist with the individual health insurance mandate. Additionally, while one can “opt-out” of receiving Social Security and Medicare benefits -- although one must still pay Social Security and Medicare taxes -- none of the individual mandate proposals provide for an “opt out” other than for yet undefined religious objections. Interestingly, a suit being led by former House Majority Leader Richard Armey is challenging a federal regulation that suggests that opting out of Medicare will put a person’s Social Security benefits at risk.7"

Abroad: What do foreign countries, constitutions tell us?

Pro

Health insurance mandates are legal abroadEzra Klein. "The importance of the individual mandate." Washington Post. December 16, 2009: "Pick your favorite system. Socialized medicine in Britain. Single-payer in Canada. Multi-payer with a government floor in France. Private plans with heavy public regulation in Sweden, Germany and elsewhere. None of these plans are "voluntary." In some, there's an individual mandate forcing you to pay premiums to insurance companies. In some, there's a system of taxation forcing you to pay premiums to the government. In all of them, at least so far as I know, participation is required except in very limited and uncommon circumstances. And there's a reason for that: No universal system can work without it."